So I’m reading this story about people losing millions of dollars worth of Bitcoin because they can’t remember their password. I don’t really understand the security around Bitcoins, but if you have something worth that much…why would you not write your password down. I’m sure I’m missing something, but am having a hard time working up sympathy for these folks.
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But someone might steal your password . . .
Get a safe.
12345
How did you guess my password?
Same combination I have on my luggage.
No sympathy but I sure can empathize with the anxiety.
To a man, every one of my aggrieved hardcore libertarian friends jerks it to the idea of Bitcoin. “A completely decentralized, unregulated currency that the state can’t use to track you? Where do I sign up?!??” A couple have spent $1500-2000 building Bitcoin mining rigs with multiple video cards, which are noisy as shit, produce a lot of heat, and run up their electric bills as a result.
One of them had something similar happen to him where he lost access to his wallet (although it had far less money in it), and all I could think about was the “Well, if it isn’t the consequences of my own actions” meme.
Security that absolutely demands/requires an organic chemical memory process as the end-all door to a digital asset is fundamentally flawed for many, many reasons. It’s not like identity/entity proofing is new or unfounded and any digital currency that does not have that as a backup? Well, you get what you deserve. And, if you want to live your life in a way where you can’t be identity-validated? Again, you take the good with the bad and you get what you deserve.
I know several people who have lost thousands, tens of thousands…which is a substantial amount of their life savings…in Bitcoin. People who cannot afford to lose thousands of dollars. It preys on the weak and desperate. Like the lottery.
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Are these people who forgot their passwords or people who bought at the top and panic sold when it dropped?
Our son fell in love with bitcoin in high school, and liquidated all his stocks–all he ever wanted for Christmas was money to buy stocks–and bought a bunch of bitcoin. I think he paid around $40 apiece. We told him that he was nuts.
The latter. People who panicked or who didn’t really understand what they were getting into.
If he still has them, he done good. I don’t know how many you mean by “a bunch”, but they are worth around $40,000 a piece…If he can remember his password.
He came out of college and bought a house. Last week he said he was still buying, and I suspect bitcoin owners like to see other owners lose their password.
Yeah, I gathered that if these owners lose their access, their stash of Bitcoin goes back onto the open market. I don’t know all the rules, but I know there is a finite supply, so to obtain one, someone else loses one.
Actually, if an owner can’t access their coins, they’re effectively removed from circulation. There is a significant percentage of bitcoins out there that are thought to be unrecoverable. At the end of the day, that will serve to inflate the value of the remainder of bitcoins in active circulation, or at least inflate their price.
I’m pretty sure this is correct. It’s like keeping your life savings in cash under your mattress and then having your house burn to the ground.
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Thanks. So are new Bitcoin ever created? Or will there forever be this finite amount in circulation, which I guess is slowly getting less and less?
Bitcoin are created through mining, which I’m sure you hear about all the time. Waldo’s friends, for example. Mining is basically chipping in to manage the blockchain ledger. You participate in that work, you earn new bitcoins. There exist a finite number of bitcoin that will be mined. There is a schedule of how many are to be mined over time, fewer and fewer in successive years.
The finite number of possible bitcoins is basically its superpower, as the kids say these days. It cannot be diluted from its designed float. That is the main reason behind its perceived value.